There's a huge amount of oil stuck on boats in Singapore

Ships
load and unload containers at the Tanjong Pagar Container
Terminal in Singapore.Reuters

Everyone looks towards the Middle East for energy and commodities
trade opportunities, but Singapore is one of the most attractive
markets in the world, says the boss of Britain-based Trade
Finance Partners.

In fact, in Singapore there's whole treasure trove worth of oil
sitting on tankers in the country's docks because dozens of
energy and shipping companies are unable to get funding for
smaller deals to shift the goods, in an environment where the
price of oil has tanked by over 50% since summer last year.

"Singapore is one of the most exciting new markets for trade
finance, especially in commodities and shipping," said Chris Ash,
co-CEO of Trade Finance Partners to Business Insider.

"Firstly, it's infrastructure is very attractive. It runs on
English law and it's pretty anglicised so it's a lot easier to do
business there. Secondly, since Singapore's financial market
growth has been dominated by traditional banking structures,
there's no real alternative finance provision, so there's huge
demand there. For example, we were there for a three-day
conference and out of the 1,500 attendees, 50% were traders – all
of which were mobbing us for more details on what we can do for
them.

"Singapore is an island nation and the dominance of shipping
around the country. There's a huge bunker fuel market because
lots of ships use Singapore a place to re-fuel when going
elsewhere as well. Thirdly, this is where there is great
opportunity. Lots of companies haven't been able to get funding
through traditional routes to shift their goods, so they are
stuck in the ports of Singapore."

Trade Finance Partners (TFP) provides alternative financing for
companies looking to shift finished goods — stuff that can be
sold immediately on the street or in shops — as well as
commodities such as timber, iron ore, and steel. Clients range
from those with £1 million in assets to around £250 million.

It provides financing for those looking to trade goods via
shipping. But unlike the banks and other traditional routes, it
doesn't provide cash loans or expect the company to
use assets like their stockpile of physical commodities
against the loan.

Instead, TFP provides financing for companies looking to
ship commodities on a transaction-by-transaction basis, and it
buys the assets until the goods have reached their destination.

Ash explains that there's a massive market for buying and selling
bunker fuel in Singapore because it's a conduit port for
re-fueling. However, the world has seen oil and various other
commodity prices plunge over the last year and this has made it
harder for smaller companies to get financing to ship goods, as a
buyer or seller.

Bunker fuel, which is any oil used for fuel on vessels, has seen
prices plummet too.

"It's non-economic for the likes of Glencore (energy and
commodities giant) and Cargill (industrial and agricultural
services provider) to do smaller spot transactions," said Ash.

"Falling prices and large infrastructure means they can't afford
to sell, because they're using their assets as collateral for the
banks. Buyers in the meantime have to satisfy demand via the spot
market and companies can sell smaller chunks of goods in the
meantime."

Ash says that TFP could easily unlock the smaller transactions
waiting to happen in the docks of Singapore.

"Allowing a market to grow is about doing all the deals that
aren't being done – not just expanding existing accounts or
projects," he says.